Visions are compelling and unifying. Just make sure you can really bring it to life.
Look for Proof Points and Imperatives
What does a winning brand vision look like? As I noted in a recent post, the brand vision should reflect and support the business strategy, differentiate from competitors, resonate with customers, energize and inspire employees and partners, adapt to different markets and precipitate a gush of ideas for marketing programs.
Creating a brand vision that meets these requirements is a great start to success. However, the brand vision implies a promise to customers and a commitment by the organization. It cannot be an exercise in wishful thinking but, rather, needs to have substance behind it.
Is Your Vision Really Feasible Given Organizational Limitations, Resource Demands and Competitive Dynamics?
The answer comes from an analysis of proof points and strategic imperatives. Proof points come from existing capabilities and programs that enable the organization to deliver the promise of each brand vision element and its associated value proposition. IKEA supports its low prices with deep design expertise and functional products. Tesla supports its category-changing mileage range with battery knowledge and capability. Dove supports its product expansion strategy with its moisturizer image and branded differentiators such as the “weightless moisturizer” shampoos. Patagonia supports its environmental credentials with its heritage values and its programs such as the “Common Thread” effort.
Proof Points Can Be Visible or They Can Exist Behind the Scenes.
The visible proof points behind Nordstrom’s claim of outstanding personal service are its return policy and its empowered staff. The employee compensation system, together with hiring and training programs, are proof points the customer doesn’t see. Proof points are to be leveraged, but if they are weak or missing altogether a strategic imperative is needed. A strategic imperative is a strategic investment in assets, skills, programs or people.
“A strategic imperative is a strategic investment in assets, skills, programs or people.”
It’s essential if the customer promise is to be delivered. But delivering on a strategic imperative might require significant investment or a change in culture. Consider the following: For a regional bank brand that aspires to have a comprehensive customer relationship, a strategic imperative might be to equip each customer contact person with access to all of the customer’s accounts with the bank. For a premium audio equipment brand that aspires to be a technological leader, strategic imperatives might include an expanded R&D program and improved manufacturing quality. For a value sub-brand for a household cleaning product, a strategic imperative might be to develop a cost culture.
The strategic imperative represents a reality check, because it makes the critical “must-do” investments visible and thus stimulates an assessment as to the feasibility of the brand strategy. Are the investment resources available? Is the commitment from the organization really there? Is the organization capable of responding to the strategic imperative? If the answer to any of these questions is “no,” then the organization is unable or unwilling to deliver behind the brand promise.
Delivering on Your Brand Promise.
The promise will then become an empty advertising slogan. At best, it will be a waste of resources and at worst it will create a brand liability instead of a brand asset. For example, if the regional bank is not willing to invest the tens of millions of dollars necessary to create the database needed to allow appropriate customer interaction, then the “relationship bank” concept will need to be rethought. If the audio components firm is not willing to create innovative products and improve manufacturing quality, a high-end leader brand vision may be doomed.
If the household cleaning product manufacturer is not willing or able to create a sub-unit with a real cost culture, then the value market may be a recipe for failure. The Haas School of Business is a good example of an organization that recognized the strategic imperatives they needed to address if they wanted to stand out as the innovation school where faculty and students “challenge the status quo.” The curriculum, the faculty, the research programs, the alumni outreach and the admission process were all adjusted to make the school realize the vision.
Attempts at generosity may benefit companies, but only when they seem authentic.
Adam Grant’s book Give and Take suggests that all people take different dominant approaches to their jobs. They are either defined as “givers,” “takers” or “matchers.” Research shows that these different styles can affect performance and satisfaction.
I wonder if the same paradigm could be applied to brands and whether some of the psychologically-based research that Adam reports could shed light on the management of firms and brands. Are some brands and the firms they represent “givers?” And if so, under what circumstances is that style of operating likely to result in superior short-term or long-term performance?
A “giver” is concerned with what others need and is both willing and able to spend time and energy helping others, even if that time and energy will not result in personal gain. A “taker” is self-focused with an unrelenting goal of advancing his or her own career agenda. A “matcher” takes a more balanced approach, helping others when the net result will be reciprocated in a balanced way and result in fairness.
A host of studies have shown that being a “giver” can result in inferior personal performance, especially if the “giver” has little self-interest and if the measurement is not extended over time. However, the “giver” style tends to win, sometimes big, over time when the effects of creating trust, forming relationships, creating networks and moving into areas in which collaboration is important becomes more relevant factors. Though the “giver” style tends to be successful in the long run, it does require a measure of self-interest as well. There needs to be some ambition there.
An important caveat is that successful “givers” need to be authentic. Those that appear as “givers” but are really self-oriented and interested in promoting their own image (either by exaggerating their accomplishments and/or manipulating their audience) will often eventually lose, and lose big.
How would these ideas apply to brands?
A “giver” brand is customer-oriented in order to not only maximize sales but also because there is an intrinsic interest in customers and their concerns. The brand would likely also be guided by a higher purpose. They would tend to be passionate about something – think organic food and Whole Foods, on protecting the environment and Patagonia, or helping people live healthier and Kaiser Permanente. This higher purpose may be directed to people that are not just customers but also include those that share common problems like climate change, hunger or water shortage. Their “other” orientation would be sincere and supported by real programs such as Pamper Village’s microsite for baby care tips and forums, or IBM’s effort to improve education.
“A “matcher” takes a more balanced approach, helping others when the net result will be reciprocated in a balanced.”
A “taker” brand has a single-minded mission to achieve growth in sales and profits. It would tend to focus on the products and services of the firm exclusively and look to the customer mainly to make those products and services more attractive in the marketplace. A brand “taker” would subscribe to Milton Friedman’s prescription that “the social responsibility of business is to make profits.”
Can being a “giver” still result in superior performance? Will success improve over time, as the impact of more motivated employees and more committed customers provide traction?
There is no shortage of studies that show that firms that meet the giver criterion do well. For example, in his book Grow, Jim Stengel stated that 50 firms that “centered on improving people’s lives” had a decade long performance that was 400 percent more profitable than the S&P. And in their book Firms of Endearment, Sisodia, Sheth and Wolfe found that 18 publicly traded “firms of endearment” had financial performance over eight times that of the S&P. These studies and others like them fall well short of showing a cause-and-effect relationship, but they are still suggestive. Perhaps more persuasive is the concept that the sheer incidence of “giver” behavior in the marketplace would not occur if it did not have some positive impact on financials.
Brands, like people, should realize that the “giver” label should not be self-applied when the belief is not authentic and supported by substance. Like people “givers,” brand “givers” that have a false front exposed will be worse off. Not only will its image suffer, so will its long-term credibility. A brand cannot be in business only to be a “giver.” It needs evidence that its ambition will do well commercially. So those firms that allow the higher purpose to dominate, to eclipse the “giver” goals, will be at risk.
There are a lot of ways to communicate an effort beyond an obsession with financial performance. I often use the phrase “higher purpose.” But the concept of being a “giver” instead of a “matcher” or “taker” is a different and interesting perspective. Further, the empirical research on people who are “givers” vs. those that are “takers” is suggestive, if not provocative, when applied to brands and the companies they represent.
How our work with Avery Dennison, GE Healthcare and Pentair helped them develop new levers for growth.
B2B growth leaders such as Avery Dennison, GE Healthcare and Pentair share a few common essentials that are the key to their success. They prioritize meaningful innovation. They target customers who appreciate value and are willing to pay more for it. They create and deliver solutions that are hard to duplicate.
Accomplishing this takes hard work, a belief in profitable growth and an unrelenting focus on the underlying needs of customers. Put simply, these companies think through where to play and how to win one application, one industry segment at a time.
We’ve worked with B2B companies with a strong track record of sustained, profitable revenue building and have since identified five growth essentials for success:
Focus On Your Customers
You have to focus on the customers who are the key decision-makers in the value chain. A manufacturer of labels has to think about the CPG company that determines how packages are labeled, not just the distributor. Commercial insurers need to add value to the companies seeking risk management who ultimately buy their products, as well as the brokers who sell them. Finding the right decision-makers and building relationships with end customers is crucial. Their insights will ultimately drive new product and service innovation at your company.
“Finding the right decision-makers and building relationships with end customers is crucial.”
Avery Dennison put its core label business back on a sustainable growth trajectory by supplementing its distributor-focused sales effort by identifying, understanding and addressing the needs of the end customer – packaging engineers who were the drivers of packaging decorating innovation. Segment teams learned where packaging engineers played and who advised them in different industries. The Avery Dennison segment teams determined how to tailor innovation and product information to meet their requirements. By making innovation and marketing more relevant, they boosted sales.
When we began working with GE Healthcare, scores of different P&L centers proliferated in a siloed pursuit of revenue growth. It was common for five or more different GE Healthcare sales teams to call on the same customers, each selling a different product or service. GE Healthcare leadership recognized the need to drive a more comprehensive value proposition to spark hospital engagement, loyalty and growth. Through careful research, the company identified the three top opportunity segments to receive unified messaging, targeted innovation and a cross-business sales support model.
The sales organization could now work as a single team to deliver an expanded, relevant value proposition that stretched across all healthcare units. The result: Exposure to higher-level decision-makers and communicating an integrated view of how GE Healthcare’s entire spectrum of products and services could work together on their behalf.
It Starts with a Brand Vision: 6 Key Components of Successful Models
Defining this important concept clarifies strategic decisions, driving growth as it connects with audiences.
What Is Brand Vision?
Brand vision refers to the ideas behind a brand that help guide the future. When the brand vision clicks, it reflects and supports the business strategy, differentiates from competitors, resonates with customers, energizes and inspires employees and partners, and precipitates a gush of ideas for marketing programs. When absent or superficial, the brand will drift aimlessly and marketing programs are likely to be inconsistent and ineffective.
First, brand identity is the cornerstone of brand strategy and brand building. You need an articulated description of the aspirational image for the brand, and what you want the brand to stand for in the eyes of customers and employees. That description drives the brand-building component of the marketing program and greatly influences the rest of your brand’s activity. In fact, seven of the 20 principles in my book are centered on getting the brand identity concept right.
Second, I had a chance to re-label brand identity as “brand vision,” something I had long wanted to do. In golf, we call that a do-over. I had been stuck with the term brand identity because it was described in two of my previous books and countless articles I’ve written in the past. Now in this new book, I could finally change the label to “brand vision.” This term better captures the strategic, aspirational nature of the concept. The word “identity” has less energy and too often creates confusion because, for some, identity refers to the brand’s logo and visual identity as supported by graphic design.
“Brand identity is the cornerstone of brand strategy and brand building.”
When the brand vision clicks, it will reflect and support the business strategy, differentiate from competitors, resonate with customers, energize and inspire employees and partners, and precipitate a gush of ideas for marketing programs. When absent or superficial, the brand will drift aimlessly and marketing programs are likely to be inconsistent and ineffective.
The brand vision model (formerly the brand identity model) is one structural framework for the development of a brand vision with a point of view that distinguishes it from others in several ways:
The Brand Vision Model: 6 Key Components
The Brand Vision Model directs you through the process of defining your brand vision and incorporating it fully into your business. Keep these six components in mind:
1. Defining Your Brand Vision
It may be based on six to 12 vision elements. Most brands cannot be defined by a single thought or phrase, and the quest to find this magic brand concept can be fruitless or, worse, can leave the brand with an incomplete vision missing some relevant elements. The vision elements are prioritized into the two to five that are the most compelling and differentiating, termed the “core vision elements,” while the others are labeled “extended vision elements.”
The core elements will reflect the value propositions going forward and drive the brand-building programs and initiatives.
2. Incorporating Extended Vision Elements
They add texture to the brand vision, allowing most strategists to make better judgments as to whether a program is “on brand.” The extended vision affords a home for important aspects of the brand, such as a brand personality, that may not merit being a core vision element but are crucial for success. Such elements can and should influence branding programs.
Too often during the process of creating a brand vision, a person’s nominee for an aspiration brand association is dismissed because it could not be a centerpiece of the brand. When such an idea can be placed in the extended vision, the discussion can go forward. An extended vision element sometimes evolves into a core element, and without staying visible throughout the process that would not happen.
3. Selecting Unique Brand Vision Dimensions
Brand dimensions that are relevant for the context at hand are the dimensions that should be selected. And contexts vary. Organizational values and programs are likely to be important for service and B2B firms, but not for consumer package goods. Innovation is likely to be important for high-tech brands, but less so for packaged goods brands. Personality is often more important for durables, and less so for corporate brands. The dimensions that are employed will be a function of the marketplace, the strategy, the competition, the customers, the organization and the brand.
4. Keeping the Brand Vision Aspirational
It is the association the brand needs to go forward given its current and future business strategy. Too often, a brand executive feels constrained and uncomfortable going beyond what the brand currently has permission to do. Yet most brands need to improve on some dimensions to compete and add new dimensions in order to create new growth platforms. A brand that has plans to extend to a new category, for example, will probably need to go beyond the current image.
5. Representing a Central Theme of the Brand Vision
When the right brand essence is found, it can be magic in terms of internal communication, inspiration to employees and partners, and guiding programs. Consider “Transforming Futures,” the brand essence of the London School of Business, “Ideas for Life” for Panasonic, or “Family Magic” for Disneyland. In each case, the essence provides an umbrella over what the brand aspires to do. The essence should always be sought.
However, there are times in which it actually gets in the way and is better omitted. One B2B brand, Mobil (now ExxonMobil), had leadership, partnership and trust as the core brand vision elements. Forcing an essence on this brand would likely be awkward. If the essence does not fit or is not compelling, it will soak up all the energy in the room. In these cases, the core vision elements are better brand drivers.
6. Using Brand Position as a Short-Term Communication Guide for Reaching Your Target Audience
The current positioning often emphasizes the brand vision elements that are credible and deliverable. As organizational capabilities and programs emerge, or as markets change, the positioning message might evolve or change. The centerpiece of the position is often a tagline communicated externally, that need not and usually does not correspond to the brand essence, which is an internally communicated concept.
Get the brand vision right and break out internal and external brand-building programs that are “on-brand,” and you will inevitably become the leading brand you’re aspiring to be.
A good example to look at is the Berkeley-Haas School, which used solid research, inputs from stakeholders, school culture and strengths, and a very involved Dean to establish their brand vision. Putting the key ideas behind their brand— questioning the status quo, having confidence without attitude, being a lifelong student, and thinking beyond yourself— at the forefront of their operations resulted in more than a communication guide, but in extensive changes in programs and how they are presented.
Learn more about creating successful brand visions that inspire customers and employees.
Geico illustrates how challenger brands can quickly de-throne category leaders.
Do you remember when McDonald’s was “lovin’ it” as it recovered and passed by Burger King in the early 2000s, when Amazon cleared Borders’ shelves, or when Netflix canceled Blockbuster’s monthly subscription? Each of these brands dispatched their counterparts by “de-positioning” them in ways from which they could not recover.
Challenger brands
While Allstate isn’t going anywhere, Geico accomplished something historic recently by overtaking Allstate in the hyper-competitive automotive insurance market. It represents a victory of positioning for the challenger brand and a seismic shift in the insurance category that demotes Allstate to the role of chasing, where once it was the one being chased.
In fact, in February we saw Allstate launch a campaign for its online “Geico/Progressive killer.” Esurance now claims that Geico’s “15 minutes could save you 15% or more on car insurance” is far too slow for an auto insurance quote. John Krasinski narrates, “15 minutes for a quote is crazy. With Esurance, 7-and-a-half minutes could save you on car insurance. Welcome to the modern world.” Really? Allstate’s decision to challenge the time component—the 15 minutes—over the savings component—the 15%—misses the entire point of Geico’s successful brand positioning of helping you save money. In addition, by going after the time to quote for savings promise, Allstate validates Geico’s strategy in the first place—often a losing tactic for a challenger brand.
“When you have a singular brand focus and idea, customers have total clarity on what you are and what you are not.”
My friend, Professor Tim Calkins out of the Kellogg School of Management explains: “Geico is a perfect example of why positioning matters. Why buy from Geico? To save money. This is the core of the brand. Geico is a reputable company with low rates. Geico doesn’t promise the best service or the most complete coverage. It promises low rates.”
Why brand positioning is so important
To Tim’s point, when you have a singular brand focus and idea, customers have total clarity on what you are and what you are not. And to Geico’s credit, it has stayed true to the same brand positioning relentlessly for almost 20 years with arguably one of the longest-running call-to-action strategies and taglines in recent history. Because Geico hasn’t moved from its positioning, has stuck with a target segment that values price over paying for a traditional agent network model and has continued to beat a steady, relevant drum through a series of clever ads and characters—whether its cavemen, pigs, the gecko, banjo players or the newly minted camel of Hump Day fame—customers know exactly what to expect from Geico.
The need for brand relevance
Geico also realizes that consistent brand positioning and relevance must go hand in hand. So while the message has stayed the same, Geico’s advertising campaign tactics and medium usage have evolved. For example, in 2010, Geico provided mobile users with a first in the insurance industry — the ability to quote and buy a policy from mobile-friendly pages on their iPhone and Android mobile devices. Just recently, Geico was announced as the premier sponsor for the pilots of Amazon Studios’ new series, streaming on the Amazon Prime Instant Video service. It’s a wide-ranging ad deal that also includes banners and placement on the Amazon Pilot Series home page, as well as ads on Kindles with Special Offers, the cheaper version of the Kindle that shows ads. The expansion continues on new, relevant mediums but continues the “save you money” messaging.
Geico has also kept the conversation light, juxtaposed against Allstate’s darker Mayhem. Yes, the Mayhem campaign has a lot of ground to cover in auto, home and life and Dennis Haysbert’s booming voice reminds us how important insurance is. However, consumers continue to write the rules on how brands should be built. They need products and services that fit into their lives, with the price/value equations they are looking for, communicated in authentic, genuine and consistent ways. Geico has built a brand for these times and for the segments of the market that will help them drive disproportionate growth. And growth seems to be the key word when talking about Geico!
By the way, Geico is not always the cheapest. You are not truly trading price for service and you can actually get a quote in around three minutes, which is faster than Esurance’s new promise. And animals as spokespersons have a longer shelf life than humans.
The best positioning finds a single idea that matters to its customers and sticks with it. For Geico, that meant low prices. Positioning is fixed. But it’s important to continually find new ways to keep it fresh, making sure it stays relevant to core audiences.
Take a closer look at how we helped develop the Un-Carrier, shattering the competitive field.
Typical mobile industry players are regarded as arrogant and insensitive to the frustrations of the consumers. It’s an industry that has long frustrated customers with complex plans, locked-in contracts, restrictions against upgrading phones and the loss of investments in existing devices. But now, T-Mobile has introduced a game-changer to the market.
They call themselves the Un-carrier, to vividly emphasize that they are doing something radically different. They’re basing their whole philosophy around doing exactly what the customers want, as indicated by their feedback. It sounds simple. So why did it take so long to create such a strategy? And why was T-Mobile, the number 4 player in the industry, the first to innovate? (Full Disclosure—Prophet was a partner with T-Mobile in developing the new strategy.)
The “Simple Choice Plan,” introduced in March of 2013, included elements that broke long-time industry practices. Long-term contracts were replaced with monthly plans with no long-term commitment. Plan pricing that required you to estimate minutes used and text messages sent was replaced with plan pricing that was much more flexible and easier to understand. The basic plan includes unlimited talk, text and web access (up to 500MB high-speed) and can be augmented for those that need large pools of high-speed data. Finally, you can bring your own device to the program. You don’t have to buy a new phone, but if you do, T-Mobile will finance it over 24 months. When it’s paid off, the monthly bill will be reduced accordingly.
With Un-carrier 2.0, launched in the summer of 2013, family plans without necessary credit checks were added. This was a huge deal for users that are routinely slammed with multiple $200 deposits on family plans. Families could now get four lines with unlimited talk, text, and web (up to 500MB high-speed) for $100 per month, plus taxes and fees. In addition, the JUMP! (Just Upgrade My Phone) Program recently launched, where a person who subscribes for $10 a month can update their phone twice a year. At the same time improvements in their network, particularly in major urban areas, were announced, improvements that allowed T-Mobile to surpass Sprint on coverage.
And the momentum continues. In October of 2013, T-Mobile announced at a New Your concert event their Un-carrier 3.0 strategy, by which they would deliver unlimited global data at no extra charge in 100+ countries. The program was a dramatic attack at the practice of charging large fees for cross-border connections.
Then, at the 2014 Consumer Electronics Show (CES), T-Mobile announced an offer to pay the termination fee of the locked-in customers of Verizon, Sprint or AT&T and give them a credit toward a new phone. The colorful T-Mobile CEO, John Legere was quoted as saying, “We are either going to take over this whole industry or these bastards are going to change.”
Since the Un-carrier launch, T-Mobile has steadily brought this strategy to life through positioning, framing the discussion, messaging, communications, customer experience and employee engagement. The strategy was supported by humorous advertising (advertising gets easy when you have something to say) that featured Bill Hader as an inept phone user who welcomed the Jump! program. The JUMP! campaign was led by some outrageous (think Steve Jobs-style) presentations by Legere talking about why customers are switching to T-Mobile and how backward competitors are.
“They’re basing their whole philosophy around doing exactly what the customers want, as indicated by their feedback.”
At the beginning of 2013, T-Mobile was suffering from an ongoing loss of share that affected its image as well as its financial health. The Un-carrier initiative dramatically changed that. At one point during the campaign, T-Mobile was gaining customers at a rate that exceeded the three competitors combined. Further, according to a study by Baird Equity, 26 percent of potential wireless carrier switchers are looking at T-Mobile, as compared to 9 percent for Sprint, 10 percent for AT&T, and 19 percent for Verizon. In the minds of many, T-Mobile went from an also-ran company to a firm with a leadership position that reinvented a major industry. It’s an amazing achievement.
There are 5 lessons to be learned from T-Mobile’s Strategy:
As I discussed in Brand Relevance, the only way to grow is to create “must haves” that define a new subcategory
T-Mobile was not able to grow until it did just that, developing a half dozen “must haves.” Note that the disruption was not caused by a technological advance, but by some simple changes in pricing and contracts.
A new subcategory needs to be protected
T-Mobile protected its innovative, disrupter position with breakthrough brand-building and ongoing game-changing innovation.
The disruption was driven by an understanding of basic customer frustrations and complaints
In fact, it did not take strategic insight that was subtle and nuanced. Perhaps the depth and influence of these customer issues were underestimated, but they were well known.
Any brand can become a true challenger brand
It is interesting that the brand that pulled off this innovation wasn’t Verizon or AT&T, but the fourth-place player. Why was that? The industry leaders had too much to gain by sticking with the status quo. As a challenger brand, T-Mobile had less to lose and more to gain by disrupting the wireless category and doing what the other carriers do not; they put the customers’ needs ahead of business-as-usual.
Once you start innovating, keep up the momentum
All three major competitors scrambled to respond with their own versions of fewer contracts, quicker upgrades, cheaper plans and more. To maintain relevance, they had no choice. But they are all clearly copying the innovator, playing catch up. Although these competitors have an impressive set of assets, it is likely that the market structure will be changed by the T-Mobile initiatives. Further, the T-Mobile momentum and energy will make it hard to reverse these changes.
The disruption of a major industry doesn’t happen very often. But when it does, there will be significant growth almost always from a new entrant or an also-ran. The essence of strategy in dynamic times is to drive disruption, understand it and maintain relevance in the new marketplace.
It’s important to reassess your personal values: What would make you walk away from an employer?
What Are Your “Take My Name Off the Door” Values?
I was recently reminded of the power of meaningful organizational values when I watched Leo Burnett’s farewell speech, “When To Take My Name Off the Door.” In his own style, he talked about making outstanding advertising, which is the core value of Leo Burnett.
He says: “Somewhere along the line after I’m finally off the premises, you – or your successors – may want to take my name off the premises, too. That will certainly be OK with me. But let me tell you when I might demand that you take my name off the door. That will be the day:
When you spend more time trying to make money and less time making advertising – our kind of advertising
When you forget the sheer fun of ad making and the lift you get out of it
When you lose that restless feeling that nothing you do is ever quite good enough
When you lose your passion for thoroughness…your hatred of loose ends
When you are no longer what Thoreau called “a corporation with a conscience”
When you disprove of something, and start tearing the hell out of the man who did it rather than the work itself
When you stop building on strong and vital ideas and start a routine production line
When you start believing that, in the interest of efficiency, a creative spirit and the urge to create can be delegated and administrated, and forget that they can only be nurtured, stimulated, and inspired
When you start giving lip service to this being a “creative agency” and stop really being one
THAT, boys and girls, is when I shall insist you take my name off the door. And by golly, it will be taken off the door. Even if have to materialize long enough some night to rub it out myself – on every one of our floors. And before I de-materialize again, I will paint out that star-reaching symbol too. And burn all the stationery. Perhaps tear up a few ads in passing.”
“The Leo Burnett core value doesn’t sound like much until it is elaborated with a multidimensional perspective.”
The Leo Burnett core value doesn’t sound like much until it is elaborated with a multidimensional perspective, buttressed with the numerous anecdotes reflecting the style and standards of the founder, and brought to live with legendary campaign role models (such as “Maytag: The Dependability People,” United’s “Fly the Friendly Skies,” Allstate’s “Good Hands,” the Marlboro man, the Jolly Green Giant, the Keebler Elves, and countless others).
Organizational values are almost always central to the long-term success of a business. They underlie any successful business strategy, they are the basis for a market-facing brand vision that differentiates and provides credibility, and they contribute to an internal brand that inspires and clarifies. Among those values should be a few signature values supported by substance and by stories that are central to the business. When they fade, the business may no longer reflect the brand. And as a result, its equity and legacy may become damaged.
So if the Haas School loses its “confidence without arrogance,” if being “weird” is no longer comfortable at Zappos.com, if Patagonia stopped using its business to inspire and implement solutions to the environmental crises, if Apple stops creating leadership products that extend human capability, if IBM stops focusing on being dedicated to every client’s success, or if Prophet was no longer about liberating ideas, inspiring people and driving impact, then in each case, the soul of its organization and the essence of its brand will have been compromised.
The start of a new year is a good time to reflect on values. What are your business and brand values? Which are the signature values that represent the core of the organization and brand? Which values support the heritage brand? Do the employees and partners know and care about the values? If answers to these questions don’t come easily, it may be time to invest in their creation and articulation.
New fans matter. But its real secret is deepening relationships with its most devoted customers.
As the Chief Growth Officer at Prophet, I see a lot of companies struggle with growth—both where to find it and how to manage it. And unfortunately, oftentimes marketing isn’t even part of those conversations. That’s why I never stop marveling at the way Steve Robinson, Chick-fil-A’s senior vice president and chief marketing officer, and his team combine their role as marketers with the businesses’ broader goals and growth targets.
Recently, I sat down with Steve to talk about what he’s learned in his 32 years at the fast-growing QSR chain. Between gains from its existing restaurants and opening new stores, the company has been growing at the enviable rate of roughly 13 percent annually, which means the business doubles every five to seven years. Not jealous yet? For the last several years, it’s even managed to do so with no borrowing.
“Our growth is based on two things,” he says. “The first is brand relevance, which includes everything from menus, buildings, service, technology, packaging and sustainability. And next, we have a strong focus on our Operators to ensure they have what they need to grow same-store sales.”
Here are six of Chick-fil-A’s marketing strategies that apply to the many companies looking to find new paths to growth:
Build your “raving fan” base
Long before social media experts talked about WOM and brand ambassadors, Chick-fil-A had identified a type of customer it nicknamed “Raving fans.” Of the 7 to 10 million people eating at its restaurant each week, this is a rabid subset, about 10 to 15 percent of its total audience. They visit Chick-fil-A four or more times each month, and are so jazzed about the company that they even dress up as the brand’s famous cows to celebrate “Cow Appreciation Day” to win a free sandwich.
Of course, Robinson says the company always strives to bring new fans in at the top of the funnel. But these die-hards “are crucial to the health of the business and help us grow. Our goal and strategy is to build special relationships with them.” To that end, Chick-fil-A Operators go to incredible lengths. They might follow a customer out to their car, holding an umbrella on a rainy day. A recent example: After Auburn’s recent defeat of the University of Georgia, some homebound fans phoned in an order, even though the store was about to close. Not only did the restaurant stay open, when the Operator discovered they were bereft “Dawg” fans, he gave them the meal for free. “No one told the Operator to do that,” Robinson says. “They create these fans themselves every day, and we’re constantly amazed at the innovative ways they think of to deliver this level of unexpected service.”
Know what will make your customers happy tomorrow
Whether it’s a Peppermint Chocolate Chip Milkshake, ever-more-clever cow “Eat Mor Chikin” ads, or a new mobile payment app, Robinson says the company tries never to lose sight of what delights its customers.
“Yes, great crave-able food is the most important thing. But how do we plus-it-up with great service, interactions, and experiences?”
Steve Robinson, Chick-Fil-A
That also means reaching beyond known pleasure points to discover new ones: “Sometimes customers don’t know what they want yet. Our job is to uncover those things and get out ahead of them. It’s like my favorite Wayne Gretzsky quote, ‘We need to go where the puck is going, not where it’s been.’”
To that end, Chick-fil-A recently opened “Hatch,” its 80,000-square-foot innovation center, to explore new ideas in food, design and service. Among its breakthroughs so far: Streamlined technology to make ordering and payment faster and easier, and a new way of fixing chicken that actually required patenting and building a new custom grill. “By May, you’ll hear us talking a lot about this new platform for grilled chicken. That is a hardware innovation, but it is key to our marketing message of relevant menu improvement.”
Build relationships, not transactions
Selling more sandwiches is a good thing, but to Robinson, almost beside the point. Real growth, he maintains, comes from rich relationships, not minor sales blips. College football is one of his favorite examples, and the company has been involved with college sponsorship for 17 years. “It’s our sweet spot,” he says, “a demographic and lifestyle fit. College fans, alumni, and viewers index very high for Chick-fil-A.” The company tracks engagement by measuring reactions to digital offers made during games: Some 75 percent of Chick-fil-A customers watch with a second screen in their hand.
“We also activate on the ground, giving away food at Chick-fil-A Bowl games, and at events on campus. Our Operators strike vendor relationships with stadiums. We have Operators in the communities who have great relationships with over 200 athletic departments where we provide catering.” Yes, it’s an expense, and not always an easy one for everyone to grasp. “But for us, measured in terms of relationships built and enjoyment for fans and our customers, it’s worth it.”
Stand up for your customers, even when it’s difficult
Robinson, who is also on the executive committee, says marketing has earned its seat at the table primarily “by being a relentless advocate for the customer.” Sometimes, he concedes, that requires tenacity. A current example: Building restaurants that are LEED-certified, a sustainability certification that carries greater expense. “That may not sound interesting to all of our leaders, but it is very important to our customers. Which makes it a priority.”
Decide how you won’t grow
Robinson and his team are keenly aware of the fierce battle for share of America’s stomach. More than half of the country’s meals are now eaten away from home. As restaurants proliferate, even convenience stores and grocery chains are now selling prepared meals, fighting for every breakfast, lunch and dinner. “But we know we will not compete on price. For us, the evolution has been how to do more than food. Yes, great crave-able food is the most important thing. But how do we plus-it-up with great service, interactions, and experiences?”
Bring grace to the table
Robinson admits he’s had to learn a lot, both personally and professionally, to roll with the punches that come with engaging on a political or social issue. Last year, the company found itself embroiled in a controversy over remarks Dan Cathy, COO and son of founder Truett Cathy, made regarding same-sex marriage. The ensuing firestorm resulted in boycotts, protests, and even nasty Tweets from some mayors. The company eventually issued a statement that it would harken back to what has always been most important to Chick-fil-A – serving everyone with honor and respect. “The experience reminded me about the spirit of hospitality, of graciousness, that this company was founded on. Everyone is welcome at Chick-fil-A. Everyone should feel at home. The root idea is grace, and our Operators have really leaned in and stayed true to that model, even handing out food and water to protesters. Staying true to our core values can help weather any PR storm.
Steve’s tenacity at growing Chick-fil-A in both a gracious and aggressive manner should give current and future marketing leaders something to think about as they head into 2014.
This post originally appeared on the Forbes CMO Network on Scott Davis’ blog, The Shift. To read related thinking from Scott on Forbes, follow his blog here.
Of course, long-term growth strategies matter. But there are many ways to boost revenue–starting right now.
Quick wins are crucial to any growth strategy. They build momentum and fund investment for longer-term growth initiatives. Cost-cutting, acquisition and restructuring are important tools in improving short-term gains, but they often distract organizations from building revenue organically.
Immediate, customer-driven revenue gains are often overlooked in the search for quick wins. When combined with prudent cost reduction they yield tangible results and keep employees focused on the customer. They also build the marketing, sales and innovation competencies needed to grow even faster in the future.
At Prophet, we’ve developed a checklist of ten rapid revenue drivers based on the repeated achievements of successful growth organizations. But first, let’s ensure we’re all clear on what organic growth means:
What Is Organic Business Growth?
Organic business growth is achieved by using your existing resources to expand your business. On the other hand, inorganic growth is done through mergers, acquisitions, and takeovers.
Organic growth is a key method for yielding tangible results, keeping employees focused on customers, building marketing, expanding sales, and innovating.
10 Ways to Organically Drive Business Growth
To help you determine some quick ways to drive organic growth, we’ve developed a list of ten essential strategies, based on organizations we’ve seen grow successfully:
1. Sell More to Your Best Customers
It’s easy to believe your biggest customers are also your best customers. But, usually, it’s a myth. An analysis of profit contribution, cost-to-serve and organic growth potential can highlight key customers worthy of an intense, cross-company focus. We’ve repeatedly seen that type of full-court press on just 10 to 20 percent of the customer base (the best customers) boost bottom-line profit by 5 percent or more.
2. Make the Most of New Customer Relationships
The early days of a new relationship are critical, and yet one of the most overlooked parts of the customer experience. Clients across categories consistently express the greatest willingness to buy more and to try different products just after they come on board. Why not take advantage of that honeymoon period, offering more products, services and accessories?
There’s a long-term benefit as well. Our studies on behalf of clients have found that on average, customers who make a second purchase within 90 days of the first purchase are more than double the lifetime value of the average customer.
3. Focus on Your Sales Team
For immediate impact, adding or beefing up the sales team is one of the most effective drivers of organic growth. This is especially true in industries with multiple sales channels. We’ve seen it work for a national insurance company, which got immediate results by resisting the urge to cut costs and instead adding sellers to its highest-growth market. And we have also found a consistent pattern of profitable revenue gains from targeted sales-strengthening moves in Fortune 500 companies. Many didn’t even increase headcount, but rather redeployed existing resources, using better training and better processes. Redeploying resources generates an almost instant payback versus the typical six to 12-month payback from new sales hires.
4. Optimize an Upcoming Launch
Too many line extensions and not enough blockbusters scheduled for launch next year? Prioritizing the most important introductions and focusing on execution is one of the simplest ways to organically boost revenue. It won’t create best sellers, but it avoids having a plethora of small launches dilute impact among customers.
It doesn’t happen as often as it should because it takes day-to-day diligence and a willingness of functional teams to work together. But when leaders focus on cross-functional priorities, time-to-market improves an average of 20 to 30 percent, mostly from avoiding the delays that build up in over-extended organizations. These gains require little to no incremental investment.
5. Raise Prices Strategically
While across the board price increases may be inadvisable in competitive markets, there are usually groups of customers or clusters of products that can withstand a price increase without slackening demand. Our clients have repeatedly identified 20 percent of their lines with lower elasticity due to a different competitive set or different buyer profiles. Selective price increases are one of the fastest and lowest risk moves a company can take because almost all the benefits flow to the bottom line and the investment in analysis takes only a few weeks.
6. Implement a Measurable Media Strategy
Insufficient data is no excuse for not being able to assess the impact of media investments or failing to conduct marketing mix analysis. If media isn’t measurable, shift the mix to media that is. If it is measurable, dig in and start optimizing. We have found that companies who have shifted marketing dollars to digital mediums have been able to quickly launch, test and learn new value propositions and pricing, which can add 10 to 15 percent incremental revenue.
7. Consider Organizational Change
Organizational change can definitely result in greater working efficiency and increased productivity, but keep in mind that organization-wide restructuring is incredibly taxing for leaders and employees— it creates upheaval and usually takes a while to pay off.
The cross-functional dependencies required to innovate, sell and market are easily disrupted— so evaluate your goals and your timelines before you decide to rock the boat now, or whether you need to focus on short-term growth.
If your primary goal is long-term organic growth, consider an organizational change. But if your priority is short-term business growth, concentrating on encouraging and supporting the work of informal multi-functional teams will have a greater impact.
8. Refresh Best-Selling Products
When times are tough, supply chain leaders want the sales force to focus on over-inventoried products. Finance frets about margins. And product engineering looks to the newest thing – even if it doesn’t have a benefit. Don’t indulge. Take your best-selling products and focus on selling more of them.
Crayola increased crayon sales by 50 percent in a single year by renaming a few colors. Samsung boosted washing machines sales by 15 percent, simply by making them in bright reds and blues. Find ways to refresh the products through color, materials and packaging. Explore new marketing avenues through brighter merchandising, sharper messaging and more inspired promotions.
9. Rework Your Sales Pitch
It’s usually just a few highly skilled members of the sales team who produce the bulk of incremental sales. Use their experience and customer understanding to rework the pitch for the rest of the team. A sharper pitch, particularly when it shifts focus to customer issues and delivers solutions, can have an immediate organic growth payoff.
Avery Dennison generated remarkable results by doing just this for their reflective materials division. A single pair of salesmen sold five times the average. It turned out they talked about the advantages of the product in a totally different way than their colleagues. The revelation changed the way everyone else went to the market and transformed the marketing message.
10. Set Concrete Goals & Reward Success
It is amazing what people can do if they have a concrete goal to speed up a launch or introduce an important initiative. Detailed process redesign may be crucial to long-term speed-to-market improvements. But in the short term, there is no substitute for asking teams to go faster, celebrating their success and rewarding them for the additional effort. The secret sauce? Growth leaders at these companies take the time to find and unclog administrative and process bottlenecks their teams are facing.
Beyond the power to boost revenue in the short term, organic growth wins also provide key insights into your customers and their motivation. This customer focus will help sharpen your strategy every step of the way.
Learn how Prophet can help you implement a more successful growth strategy within your organization.
Advanced companies need integrated tools to succeed in digital business. Suites are the solution.
As companies become advanced in social and digital business, they require consolidated technology instead of point solutions
Adobe Marketing Summit and Oracle OpenWorld both took place recently. It’s another month until Dreamforce, but I expect similar announcements to be made there. These giants are all building “suites” for cross-channel customer engagement through a series of acquisitions and integration with their existing offerings (see Figure 1). Among the pieces, each has bought social media monitoring and management tools, as well as marketing automation players. Having a complete social offering is a big part of this, but it’s also about integrating social with other customer engagement channels for the best data, targeting, and contextualization. The result: a technology suite that goes beyond just social, designed to entice CMOs with one-stop shopping convenience. Figure 1: How Three Companies Are Creating Digital Marketing Suites
Component
Salesforce
Adobe
Oracle
Social media monitoring
Salesforce Marketing Cloud (Radian6)
Adobe Social (Adobe SocialAnalytics)
Oracle SRM (Collective Intellect)
Social media management
Salesforce Marketing Cloud (Buddy Media)
Adobe Social (Efficient Frontier / Context Optional)
Oracle SRM (Vitrue & Involver)
Social media advertising
Salesforce Marketing Cloud (social.com)
Adobe Media Optimizer (Efficient Frontier)
N/A for now; on product roadmap
Marketing automation & multi-channel targeting
Salesforce ExactTarget
Adobe Campaign (Neolane)
Oracle Eloqua
Analytics & insights
Salesforce Marketing Cloud (Radian6)
Adobe Analytics (Omniture)
Oracle SRM and OBIEE (Oracle Business Intelligence Enterprise Edition)
Content marketing
No internal component, but integration (e.g. Kapost)
Experience Manager & Creative Cloud
Compendium
Enterprise social network
Chatter
N/A, although has built collaboration into Marketing Cloud
Oracle Social Network
Data & CRM
Salesforce
No CRM, but has Omniture DataWarehouse and data connectors into partner solutions
It should go without saying that this chart is not an exact comparison and that line item “components” vary in complexity. The degree of integration also varies.
Advanced companies need integrated tools to succeed in digital business
These suites are finding an audience ready for a better option. Focused on social business for a moment, brands are getting increasingly advanced, yet they continue to use point solutions in different departments and channels for monitoring, management, optimization, and analytics. In a typical example, one of our clients uses Radian6 for monitoring, Vitrue for social content publishing, Cotweet for customer care, and Adobe Analytics (formerly Omniture) for web analytics.
Plus enterprise social networks and customer communities are disconnected. The result is disparate sets of data being compared in Excel, mixed levels of communication and collaboration, and lost insights. The emerging need for more integrated solutions has been anticipated by Salesforce, Oracle, and Adobe, who are now assembling Digital Marketing Suites.
Best-in-class point solutions dominate today, but change is coming
Although point solutions can’t fully address the needs of an advanced social business, they are often best-in-class—because the promise of the Digital Marketing Suite has yet to be fulfilled. When advising clients on monitoring tools or SMMS today, we often end up recommending point solutions. This is based on specific client requirements, which vary, but it’s not often that one of the “giants” makes it to the very top of a shortlist. With SMMS for example, the offerings are good but not typically best for the client. And overall, the benefits of a suite aren’t compelling enough today—but over the coming 12-18 months, they will be.
“The promise of the Digital Marketing Suite has yet to be fulfilled.”
The future is suites—or irrelevance
Not only will there be consolidation in terms of technology coalescing into larger suites, but the marketplace will also go through the natural evolution and consolidation as the landscape matures. For social marketing vendors determined to stay independent, there is only one option: to raise money to scale into suites themselves by buying or quickly building missing components like monitoring, optimization, and analytics. Several SMMS vendors like Hootsuite, Sprinklr, Spredfast, and HearSay Social have raised significant rounds of financing to build scale.
They are embedded and tough to replace, and integration-enabling APIs may extend the timeline, but over time that will not be enough to support so many players. Consolidation or exits are an inevitable outcome, as it has been in previous technology spaces. A few of the other SMMS vendors have already folded, like Awareness Inc. and Syncapse. This left their customers high and dry and needing to start the search for vital tools all over again. That has been another reason why some companies are looking to the big players—simple staying power.
What does the future look like with Digital Marketing Suites?
Beyond the obvious benefits of integration, like fewer tools and logins, and platform security that come from an integrated suite, there are four impending changes that marketers should watch closely:
1. Internal and external social networking on a single platform
In SMMS, collaboration features are mostly limited to basic workflow (tag, flag, annotate, route). Yet as social permeates an organization, the need for internal communication through Enterprise Social Networks (ESNs) becomes necessary to plan and react to external engagement. Adobe has already made a push to bring greater collaboration into its new Marketing Cloud offering, although it does not have an ESN product of its own. Salesforce will undoubtedly integrate Chatter into future offerings of its own Marketing Cloud, while Oracle is embedding Oracle Social Network into the social publishing workflow for collaboration. Companies with installed ESNs are also eager to tap and evolve internal employee engagement and direct it toward external conversations for purposes like providing customer support and employee advocacy.
2. Company-wide utility—this is not just for one department
Most SMMS address one or two departments’ needs well, yet we found that companies today are likely to have up to 13 departments involved in social. Social customer support may require the features familiar to a call center, whereas marketing may require a content repository and an editorial calendar that includes earned media. Because each department has different use cases and metrics, these suites are looking to address the needs of many departments rather than just the one or few primarily addressed today. Marketing is central, but other stakeholders are increasingly being involved.
3. Customer relevance and targeting (Social CRM)
Speaking of sharing nicely across departments, the growing need for a common view of customers’ social profiles and social behavior data is also driving a move to suites. Several SMMS vendors have focused on customer identification and targeting from the outset—but few integrate well with marketing automation and enterprise CRM systems in order to know and target customers based not only on social data, but all available customer data.
To take an example, Walmart allows Facebook fans to Like local stores, then shows them items specific to that store, based on comparative local prices and even the local weather. By integrating (in this case, location) data, the relevance of its content is increased. For now, customers remain mostly anonymous, so only certain layers of relevance may be applied at any given time (geography, demographics, psychographics, socialgraphics, mobilegraphics, brand affinity, loyalty program, etc.). So far, the local Walmart pages have little engagement, since they still feel impersonal compared with other local businesses.
Eventually, though, companies will have a single customer view, connecting these layers of relevance for contextual, personalized messaging for individual customers and prospects. This has been a long-term promise and the customer journey keeps getting more complex, but Adobe, Salesforce and Oracle have all been especially focused on this of late.
4. Bigger sticker price and IT involvement
The average enterprise deal size for SMMS has steadily increased over the past few years, rising from $76k last year to deal sizes of what we typically see today in the $100-150k range. This reflects a growing ability to spend on social software where there is perceived value.
These larger Digital Marketing Suites will naturally be even more expensive, but as social is integrated, an independent social business technology budget will be a challenge for most marketing organizations that are still just beginning to build out their social business capabilities. Also, because these suites are larger in scale and require greater care to be “plugged in” correctly, marketers will need IT to be more involved than it has been in decisions like SMMS, which marketing departments have in some cases been able to buy and install on their own.
P.S. Digital Marketing Suite seems like a good name for now, but this goes not only beyond social but even beyond marketing. While Adobe and Salesforce each have their “Marketing Cloud,” Oracle has its “Social Relationship Management,” which is department-agnostic, but of course, focuses on Social (Oracle Eloqua is referred to separately for now). So what is this called, really, and does it change over time?
While there are still plenty of best-in-class point solutions, more companies are offering a full suite of solutions. And it’s about time. Advanced companies need more integrated tools, so they can better navigate complexities. The future is either suites–or irrelevance.
Some people think MRIs and EEGs may soon be a standard in the marketing research suite. We’ll see.
Neural marketing, which involves techniques such as fMRI (functional Magnetic Resonance Imaging) or EEG (electroencephalogram), is a hot topic in marketing. It can purportedly generate insight into consumer response to marketing variables while reducing the biases inherent in asking consumers their opinions, such as when they are not able or willing to give valid answers to questions involving perceptions, attitudes, or behavior. Further, consumers are driven in part by subconscious thoughts and emotions that neural marketing techniques can access. There are estimates that 95% of all thoughts are subconscious.
Neural marketing, in the right context, can measure variables like attention, engagement, emotion, pleasure/liking, and memory. Each of these can be an extremely relevant dependent variable of interest when testing or evaluating many marketing stimuli.
Here are several interesting anecdotes involving neural marketing:
The MiniCooper from BMW was designed with the aid of fMRI equipment. The physical characteristics of the model were linked to a highly likable and beautiful baby face. It was said that the resulting design made people feel like caressing the car.
Frito-Lay used EEG technology to learn that when Cheetos made the fingers of an eater turn orange a strong response was created. The consumers liked the messiness of the product perhaps because it reflected an indulgent experience and because it indicated that the product really was infused with cheese. This insight was exploited in an advertising campaign.
Neural research has helped practitioners design stimuli that lead to engagement on social media.
The Weather Channel has used EEG and eye-tracking to measure viewer reactions when showing different promotions to a popular show.
What is the future of neural marketing? Will it become an important and even game-changing technique? Or will it become more of an academic research tool that will be helpful commercially in niche contexts? I predict the future is more in line with the latter because of fundamental limitations.
The equipment is highly intrusive which limits the stimuli that can be presented. The EEG measure requires wearing a hat with measurement devices attached. The fMRI is beyond intrusive. Respondents have to ride through a tunnel and endure the risk of claustrophobia and the loud, high-pitched noises that accompany most experiences.
EEG technology is not capable of reaching the interior of the brain where an area reflecting pleasure and liking exists. The fMRI is extremely expensive to own and to use, the polar opposite in terms of the cost of conducting something like Internet-based surveys.
The results are ambiguous and probably unreliable even in expert hands. It turns out that a lot of emotions can activate most regions of the brain in addition to target stimuli; in fact, some may be the opposite of what is being hypothesized, for example, eliciting disgust rather than liking. It takes a great deal of skill and experience to design experiments that guard against spurious results and to interpret the results accurately. Research to determine if findings are robust is probably rare.
“Neural marketing, in the right context, can measure variables like attention, engagement, emotion, pleasure/liking, and memory.”
Neural marketing reminds me of motivation research that was introduced in the 1950s by Ernest Dichter. Like neural marketing, motivation research aimed to understand the subconscious and its impact on motivation and choice. Dichter, a clinical Freudian psychiatrist, used in-depth interviews to find out what was motivating people. He famously linked Campbell’s soup to a mother’s love. He was very good at translating his insights into why people buy into copy like “wash your troubles away.” In the hands of Dichter, the insights were magical. But, more generally, as time passed and it became clear that motivation research insights were often not reproducible, the method was all but discredited a few decades after Dichter pioneered them. However, it is clear that many of the current qualitative research techniques incorporate some of his methodology.
My take is that in the right hands and when addressing the right problem and context, neural marketing can be helpful but it should not be oversold. And, at least with the current technology, it will be something of a niche technique. It will make significant advances in technology for it to do more—but I and others have underestimated new technologies before…
Brand equity is a term used to describe the value of having a recognized brand, based on the idea that firmly established and reputable brands are more successful. More specifically, it’s a set of brand assets and liabilities linked to a brand name and symbol, which add to or subtract from the value provided by a product or service.
Connecting “brand” to the concepts of “equity” and “assets” radically changed the marketing function, enabling it to expand beyond strategic tactics and get a seat at the executive table.
To help break down brand equity and provide details about how the term is used in the marketing industry, we’ve outlined how it all came into place, why it’s so valuable and a roadmap for success.
How Brand Equity Came Into Place
In the late 1980s, brand equity was just emerging as an important idea. An avalanche of researchers, authors and executives who provided substance and momentum to this idea reframed marketing.
In 1991, I published a book, Managing Brand Equity, which defines brand equity and describes how it generates value. This model provided one perspective on brand equity that is worth another look now more than twenty years later.
Why Is Brand Equity So Valuable?
Another aspect of the definition of brand equity that I presented in my book was the argument that brand equity is that it also provides value to customers. It enhances the customer’s ability to interpret and process information, improves confidence in the purchase decision and affects the quality of the user experience.
The fact that it provides value to customers makes it easier to justify in a brand-building budget. This model provides one perspective of brand equity as one of the major components of modern marketing alongside the marketing concept, segmentation, and several others.
The Roadmap for Building & Managing Brand Equity
Brand equity has four dimensions—brand loyalty, brand awareness, brand associations, and perceived quality, each providing value to a firm in numerous ways. Once a brand identifies the value of brand equity, it can follow this roadmap to build and manage that potential value.
Brand Loyalty
Reduced marketing costs
Trade leverage
Attracting new customers via awareness and reassurance
Time to respond to competitive threats
Brand Awareness
Anchor to which other associations can be attached
Familiarity which leads to liking
Visibility that helps gain consideration
Signal of substance/commitment
Brand Associations (Including Perceived Quality)
Help communicate information
Differentiate/Position
Reason-to-buy
Create positive attitude/feelings
Basis for extensions
The introduction of brand loyalty to the model was and is still controversial, as other conceptualizations position brand loyalty as a result of brand equity, which consists of awareness and associations. But when you buy a brand or place a value on it, the loyalty of the customer base is often the asset most prized, so it makes financial sense to include it.
And, when managing a brand, the inclusion of brand loyalty as a part of the brand’s equity allows marketers to justify giving it priority in the brand-building budget. The strongest brands have that priority.
Examples of Brand Equity
Positive Brand Equity
Amazon and Apple are classic examples of brands with positive brand equities. Both Amazon and Apple provide consistent customer experiences, are dependable, innovative, and purposeful, and are integral in people’s day-to-day lives, making them indispensable.
They also deliver on their promises to customers— Amazon provides convenience and industry-leading shipping options, while Apple prioritizes innovation and sleek design. All factors combined, these brands boast positive reputations or brand equities.
Negative Brand Equity
When it comes to negative brand equity, Volkswagen is an example that can be learned from. In September 2015, the EPA issued a notice of violation stating that the brand had been falsifying emissions numbers. As the news spread, Volkswagen lost brand equity, since the public no longer viewed the brand as trustworthy, nor as adhering to its promises to be environmentally friendly.
Brand equity is a key factor in both marketing and business strategy thanks to the idea that brands are assets that drive business performance over time. The equity of a brand is not only a tactical aid to generate short-term sales, but also a strategic support to creating long-term value of an organization.
Learn how Prophet helps businesses build and manage brand equity that drives growth.
